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Posts Tagged: Agnitum

Last week, Microsoft Corp. made headlines when it scored an unconventional if not unprecedented legal victory: Convincing a U.S. court to let it seize control of a Chinese Internet service provider’s network as part of a crackdown on piracy.

I caught up with Microsoft’s chief legal strategist shortly after that order was executed, in a bid to better understand what they were seeing after seizing control over more than 70,000 domains that were closely associated with distributing hundreds of strains of malware. Microsoft said that within hours of the takeover order being granted, it saw more than 35 million unique Internet addresses phoning home to those 70,000 malicious domains.

First, the short version of how we got here: Microsoft investigators found that computer stores in China were selling PCs equipped with Windows operating system versions that were pre-loaded with the “Nitol” malware, and that these systems were phoning home to subdomains at 3322.org. The software giant subsequently identified thousands of sites at 3322.org that were serving Nitol and hundreds of other malware strains, and convinced a federal court in Virginia to grant it temporary control over portions of the dynamic DNS provider.

Microsoft was able to do that because – while 3322.org is owned by a firm in China — the dot-org registry is run by a company based in Virginia. Yet, as we can see from the graphic above provided by Microsoft, Nitol infections were actually the least of the problems hosted at 3322.org (more on this later).

To learn more about the outcome of the seizure, I spoke with Richard Boscovich, a senior attorney with the company’s digital crimes unit (DCU) who helped to coordinate this action and previous legal sneak attacks against malware havens. Our interview came just hours after Microsoft had been cleared to seize control over the 70,000+ subdomains at 3322.org. I asked Boscovich to describe what the company was seeing.

“The numbers are quite large,” he said. “Just a quick view of what we’ve been seeing so far is upwards of 35 million unique IP [addresses] trying to connect with the 70,000 subdomains.”

Certainly IP addresses can be very dynamic — a single computer can have multiple IP addresses over a period of a few days, for example. But even if there were half as many infected PCs than unique IPs that Microsoft observed reporting to those 70,000 domains, we’d still be talking about an amalgamation of compromised PCs that is far larger than any known botnet on the planet today. So how certain was Microsoft that these 35 million unique IPs were in fact infected computers?

“We started identifying what our AV company blocks,” Boscovich explained. “We saw a lot of different types of malware, from keyloggers to DDoS tools and botnets going back there. Our position would be if you’re reaching out to these 70,000 subdomains, that the purpose would be you’re directed there to be infected or you are already infected with something. And that something was up to 560 or so malware strains we identified [tracing back] to 3322.org.”

COLLATERAL DAMAGE?

Microsoft’s past unilateral actions against malware purveyors and botnets have engendered their share of harshreactions from members of the security community, and I fully expected this one also would be controversial. I wasn’t disappointed: Writing for Internet policy news site CircleID, longtime antispam activist Suresh Ramasubramanian warned that Microsoft’s action would cause “extremely high collateral damage,” both to innocent sites and to ongoing investigations.

“So, in the medium to long term run …all that Microsoft DCU and Mr. Boscovich have achieved are laudatory quotes in various newspapers and a public image as fearless and indefatigable fighters waging a lone battle against cybercrime,” Ramasubramanian wrote. “That manifestly is not the case. There are several other organizations (corporations, independent security researchers, law enforcement across several countries) that are involved in studying and mitigating botnets, and a lot of their work just gets abruptly disrupted (jeopardizing ongoing investigations, destroying evidence and carefully planted monitoring).”

Microsoft on Monday named a Russian man as allegedly responsible for running the Kelihos botnet, a spam engine that infected an estimated 40,000 PCs. But closely held data seized from a huge spam affiliate program suggests that the driving force behind Kelihos is a different individual who commanded a much larger spam empire, and who is still coordinating spam campaigns for hire.

Kelihos shares a great deal of code with the infamous Waledac botnet, a far more pervasive threat that infected hundreds of thousands of computers and pumped out tens of billions of junk emails promoting shady online pharmacies. Despite the broad base of shared code between the two malware families, Microsoft classifies them as fundamentally different threats. The company used novel legal techniques to seize control over and shutter both botnets, sucker punching Waledac in early 2010 and taking out Kelihos last fall.

On Monday, Microsoft filed papers with a Virginia court stating that Kelihos was operated by Andrey N. Sabelnikov, a St. Petersburg man who once worked at Russian antivirus and security firm Agnitum. But according to the researcher who shared that intelligence with Microsoft — and confidentially with Krebs On Security weeks prior to Microsoft’s announcement — Sabelnikov is likely only a developer of Kelihos.

“It’s the same code with modifications,” said Brett Stone-Gross, a security analyst who came into possession of the Kelihos source code last year and has studied the two malware families extensively.

Rather, Stone-Gross said, the true coordinator of both Kelihos and Waledac is likely another Russian who is well known to anti-spam activists.

WHO IS SEVERA?

A variety of indicators suggest that the person behind Waledac and later Kelihos is a man named “Peter Severa” — known simply as “Severa” on underground forums. For several years running, Severa has featured in the Top 10 worst spammers list published by anti-spam activists at Spamhaus.org (he currently ranks at #5). Spamhaus alleged that Severa was the Russian partner of convicted U.S. pump-and-dump stock spammer Alan Ralsky, and indeed Peter Severa was indicted by the U.S. Justice Department in a related and ongoing spam investigation.

In multiple instances, Severa gives his full name as “Peter North;” Peter Severa translates literally from Russian as “Peter of the North.” (The nickname may be a nod to the porn star Peter North, which would be fitting given that Peter North the spammer promoted shady pharmacies whose main seller was male enhancement drugs).

According to SpamIt records, Severa brought in revenues of $438,000 and earned commissions of $145,000 spamming rogue online pharmacy sites over a 3-year period. He also was a moderator of Spamdot.biz (pictured at right), a vetted-members-only forum that included many of SpamIt’s top earners, as well as successful spammers/malware writers from other affiliate programs such as EvaPharmacy and Mailien.

Severa seems to have made more money renting his botnet to other spammers. For $200, vetted users could hire his botnet to send 1 million pieces of spam; junk email campaigns touting employment/money mule scams cost $300 per million, and phishing emails could be blasted out through Severa’s botnet for the bargain price of $500 per million.

Spamhaus says Severa’s real name may be Peter Levashov. The information Severa himself provided to SpamIt suggests that Spamhaus’s intelligence is not far off the mark.

Severa had his SpamIt earnings deposited into an account at WebMoney, a virtual currency popular in Russia and Eastern Europe. According to a source that has the ability to look up identity information tied to WebMoney accounts, the account was established in 2001 by someone who entered a WebMoney office and presented the Russian passport #454345544. The passport bore the name of a then 26-year-old from Moscow — Viktor Sergeevich Ivashov.

In a surprise filing made late Monday, Microsoft said a former technical expert at a Russian antivirus firm was the person responsible for operating the Kelihos botnet, a global spam machine that Microsoft dismantled in a coordinated takedown last year.

Andrey Sabelnikov

In a post to the Official Microsoft Blog, the company identified 31-year-old Andrey N. Sabelnikov of St. Petersburg, Russia as responsible for the operations of the botnet. Microsoft’s amended complaint (PDF) filed with the U.S. District Court for the Eastern District of Virginia states that Sabelnikov worked as a software engineer and project manager at a company that provided firewall, antivirus and security software.

Microsoft doesn’t specify where Sabelnikov worked, but according to Sabelnikov’s LinkedIn page, from 2005 to 2007 he was a senior system developer and project manager for Agnitum, a Russian antivirus firm based in St. Petersburg. One of the company’s most popular products is Outpost, a free firewall program. Sabelnikov’s profile says he most recently worked for a firm called Teknavo, which makes software for companies in the financial services sector.

A source close to the investigation told Krebs On Security that Sabelnikov’s alleged role was discovered after a security researcher obtained a copy of the source code to Kelihos. The researcher noticed that the source contained debug code that downloaded a Kelihos malware installer from the domain sabelnikov.net, a photography site registered to Sabelnikov’s name. That site currently links to Sabelnikov’s profile page at Russian social networking site Vkontakte.ru, which includes the same pictures found in the LinkedIn profile mentioned above.

Microsoft doesn’t mention the source code discovery in its amended complaint, but it does reference the availability of new evidence in naming Sabelnikov. The company said it also had cooperation from the original defendants in the case — Dominique Alexander Piatti and the dotFREE Group, which owned the domains allegedly used to control the botnet.

Update, Jan. 27 9:38 a.m. ET: Sabelnikov on Thursday posted a response on his blog denying Microsoft’s allegations, saying he had never participated in the management of botnets and any other similar programs. Sabelnikov also stated that he has just returned from a business trip to the United States earlier this month. Interestingly, he says he arrived in the U.S. on Jan. 21, and stayed for two days — meaning heleft either the same day or a day after Microsoft filed its brief with the court.

Also on Thursday, I published a follow-up investigation which suggests that Kelihos and its predecessor Waledac were almost certainly the work of a well-known spammer named Peter Severa.